L&T mulls realty MF

ET Bureau|

Oct 17, 2008, 01.01 AM IST

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BANGALORE: L&T the country���s largest engineering and construction conglomerate, is exploring the option of establishing a real estate mutual fund (REMF) as part of a plan to expand its portfolio of financial services to the construction industry, a top official said.

A decision is likely to be taken only after the financial markets stabilise. ���We are considering expanding our financial support to the real estate sector. REMFs are an opportunity that we will pursue at an appropriate time,��� president (Operations) J P Nayak said here on Thursday.

Infrastructure Finance Company, an L&T subsidiary, provides finance for infrastructure projects in the form of term debt, quasi-equity funding and equity investments. Another subsidiary, L&T Finance, lends money for construction equipment and commercial vehicle purchases.

L&T also has a real-estate division implementing two large residential projects, one of those in Bangalore. The Securities and Exchange Board of India (Sebi) permitted the launch of REMFs earlier this year. REMFs raise capital from investors and invest in real estate assets or securities purchased from either the developer or from an owner in the secondary market.

Sebi has suggested a list of 62 cities in which investments can be made. REMFs are allowed to invest in immovable property which is fully constructed and having clear title documents.

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